India exporting tea to China and Iran despite covid, border standoff

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KOLKATA: Indian tea exports to China and Iran have taken off despite the economic uncertainty due to Covid-19 and the standoff between India and China on border issues. Chinese importers are giving good prices for Indian black tea and shipments to the country have already begun.

Iran, too, has started importing new season orthodox teas from last week and is paying Rs 400 – Rs 450 per kg, a price higher than that of last year.

“Border tensions between the two countries have not affected exports of tea to China,” said Mohit Agarwal, director, Asian Tea and a leading exporter to China and Iran. “The Chinese are buying both CTC and orthodox black teas.”

In 2019, India had overtaken Sri Lanka in exports of tea to China riding on the rising demand for the Indian variety of black tea among Chinese millennials. India had exported 13.45 million kg of teas to China, whereas Sri Lanka, which had always been the leader in exports to China, was able to export 10 million kgs to the country.

This year, Indian tea production has already gone down by 140 million kg due to the lockdown. The weather has not been favourable in May and June in Assam as there has been excessive rains, likely impacting overall production.

Last year, India produced 1,389 million kg of teas.

When orthodox teas started coming to the market in May and June, Iran was bidding for lower price. Prices of tea this year, particularly for the orthodox variety, have remained strong due to a shortfall in production.

Agarwal said that lately, Iran has agreed to pay the prevailing price which is Rs 300 per kg. “And they have placed orders too,” he said.

Anish Bhansali, another tea exporter to Iran, said that the Iranian importers are even ready to pay Rs 400 – Rs 450 per kg depending on the quality of orthodox teas.

Last year, Iran had bought nearly 54 million kg of teas. The exporters to Iran are not facing any problem over payment. “More or less, the payment is smooth as of now. We do not know what is going to happen after a few months,” said Bhansali.

Since the production of tea in India is less and there is economic uncertainty too in Iran, exporters believe that Iran may import around 45-46 million kg of teas this year, about 10% lower than last year.

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Tagged asian tea, Assam Tea, COVID-19, India-China, Iran

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